Monsoon Rain Seen Normal in India to Boost Planting, Exports

March 13 (Bloomberg) -- India, the world’s second-biggest
rice, wheat and cotton grower, may get normal monsoon rainfall
for the third time in four years in 2013, potentially boosting
plantings and exports.

“The monsoon is likely to be normal because this is an El
Nino-neutral year,” said Jatin Singh, chief executive of Skymet
Weather Services Pvt. The chances of a drought are only 4
percent, said Singh, who correctly predicted a drought in 2009.
El Nino is a warming in the Pacific Ocean, which can parch Asia
and bring cooler weather to the U.S. The India Meteorological
Department will issue its first monsoon forecast next month.

A normal monsoon is critical to Prime Minister Manmohan
Singh’s efforts to galvanize growth as 55 percent of farmland
does not have access to irrigation. The economy will expand 5
percent in 2012-2013, the least in a decade, according to the
government. Agriculture accounts for about a fifth of the
economy and bigger harvests may cool the highest food inflation
among major economies and sustain exports of rice and wheat.

“Monsoon is always a prerequisite for getting a minimum
growth in the economy,” Madan Sabnavis, chief economist at
Credit Analysis & Research Ltd., said in a phone interview from
Mumbai. “The situation is as critical as last year, when India
had to face low demand and high inflation.”

Cutting Harvests

The weakest monsoon in three years in 2012 parched parts of
Maharashtra, Karnataka and Gujarat states, cutting harvests of
sugar, cotton and rice. The agriculture sector is set to expand
1.8 percent this year, the least in 3 years, according to the
government’s annual Economic Survey.

India’s more than 235 million farmers depend on rain for
irrigating crops such as rice and cotton. The monsoon, which
brings more than 70 percent of the nation’s annual rain, usually
makes landfall in the south in June and covers the whole country
by July 15.

“Food inflation has always been a main concern, having a
normal monsoon is definitely a necessary condition for inflation
to be under control, though by itself cannot be sufficient,”
Sabnavis said. While there hasn’t been a nationwide drought in
the past two decades, patchy rains always drive up prices of
specific commodities, he said.

India’s consumer price inflation is high and being driven
by food increases, Finance Minister Palaniappan Chidambaram said
in New Delhi today. Prices climbed 10.91 percent in February
from a year earlier, according to government data yesterday.

El Nino

The correlation between the monsoon and El Nino conditions
is very strong, Skymet’s Singh said. “There is a 60 percent
chance of a drought in an El Nino year.”

Model forecasts and expert opinion suggest that the
likelihood of El Nino or La Nina conditions developing during
the first half of 2013 is low, 7the World Meteorological
Organization said in a statement on March 11.

“We will forecast our estimate next month after taking all
parameters until March 31,” said D.S. Pai, head of long-range
forecasting at India’s weather bureau. El Nino conditions may
stay neutral, he said.

India received only 92 percent of the 50-year average of
887.5 millimeters of rain in the June-to-September monsoon
season in 2012. Rainfall between 96 percent and 104 percent of
the average between 1951 and 2000 is considered normal, while
anything from 90 percent to less than 96 percent is classified
as below-normal. Below 90 percent is a drought.

A ban on exports of sugar, rice and wheat was extended in
2009 following the weakest monsoon since 1972. Record harvests
of rice, wheat and cotton in 2011-2012, following two normal
monsoons, led to the bans being scrapped. Sugar production will
probably decline to 24 million tons in the year starting in
October from 24.5 million tons this season on drought in
Maharashtra, Agriculture Minister Sharad Pawar said today.

India may produce 110 million tons of rice in 2013-2014 if
rains are normal and more farmers adopt new technologies and
higher-yielding seeds, said Vijay Setia, a past president of the
All India Rice Exporters Association.